The Trump administration is prioritizing policies designed to address affordability issues within the United States, according to a strategic note from JPMorgan Chase. This focus is strategically timed ahead of the 2026 midterm elections, leveraging themes of value and consumer sensitivity. JPMorgan strategist Dubravko Lakos-Bujas identifies several key factors driving this approach, including specific fiscal spending initiatives, seasonal consumption patterns, and a decrease in gasoline prices. The firm’s outlook centers on stocks heavily connected to lower-income consumer spending, notably Southwest Airlines (LUV), Dutch Bros. (BROS), Walmart (WMT), Dollar Tree (DLTR), Dollar General (DG), Citigroup (C), and Chime Financial (CHYM).
Data from Yahoo Finance indicates that, except for Dutch Bros. and Citigroup, these stocks have outperformed the S&P 500 throughout 2026. This performance is largely attributed to anticipated earnings upside tied to affordability-related catalysts. The administration’s commitment to affordability is manifested in several concrete actions. A recent executive order directs the government to explore measures aimed at restricting institutional investment in single-family homes, although implementation details remain unclear. Furthermore, President Trump has proposed limiting credit card interest rates to 10% for a one-year period starting January 2026, a proposal met with strong opposition from bank CEOs, including JPMorgan’s Jamie Dimon, concerning its legal enforceability.
Beyond these direct interventions, broader economic trends are contributing to the administration’s strategy. The sustained decline in oil prices, falling below $3 per gallon for the first time since 2020, is generating significant savings for consumers. JPMorgan estimates that with approximately 300 billion gallons of liquid fuels consumed annually, and gasoline averaging $2.90 per gallon in 2026, this would translate to $20-25 billion in consumer savings across the year, assuming all other factors remain constant. This decline in fuel costs represents a major tailwind for the US consumer.
Additionally, the “One Big Beautiful Bill” tax changes are expected to generate substantial refunds for households. Provisions such as a higher state and local tax (SALT) cap, the elimination of taxes on overtime and tips, and an increased standard deduction for seniors are projected to boost refunds by 26%, or nearly $100 billion, totaling approximately 0.4% to 0.5% of gross domestic product – roughly $1,000 per household. This stimulus package is specifically targeted toward middle-income households. However, the administration recognizes that overcoming broader affordability challenges won’t occur instantly. Therefore, a focused investment in lower-income consumer stocks carries a higher degree of risk. Procter & Gamble, a major consumer goods company, has noted slower sales growth in its US and European markets, driven by consumers opting for cheaper private-label alternatives and utilizing pantry supplies more diligently – a trend that is unlikely to sustain significant long-term growth. Brian Sozzi, Yahoo Finance’s Executive Editor, emphasizes the necessity for investors to carefully consider these dynamic market conditions and seek strategies to navigate the evolving landscape.